CHAPTER

5Welcome to Reality: Legalities and Rights

Let us never negotiate out of fear. But let us never fear to negotiate.

John F. Kennedy

THIS CHAPTER'S TALKING POINTS

I.	Own It
II.	If you Don't Own It, Get Permission to Use It
III.	Protect It
IV.	Double-Check It

I. OWN IT

Your idea is a precious commodity. For it to develop, thrive, and ultimately succeed, this idea must be protected. It's the producer's responsibility to provide this legal protection. With a common-sense understanding of entertainment law, and an awareness of the contracts, agreements, and rules that are integral in each stage of producing your project, you can provide this protection. A deal can start with a hearty handshake and a verbal promise, but ultimately you want to make sure it's backed up with solid legal documentation.

This chapter explores the legal side of producing. Its purpose is to offer many of the legal basics that every producer should know. However, it is simply a guide, and a beginning producer should also consult other sources for backup or additional information: an experienced entertainment attorney, books and resources, publications, the Internet, or a legal aid service for further in-depth legal and business information. This book's web site also provides a number of resources, including an assortment of templates for legal agreements and releases.

In this chapter, we explore the primary legal aspects involved in producing—owning or optioning the story material in your project, protecting the many components of your project, and then double-checking all these elements. When you've done all this, you have given your idea, and yourself, legal protection and the freedom to move forward.

The Entertainment Lawyer

Whether you are new to producing or have years of experience, you want a strong alliance with an entertainment lawyer. He can help protect you and your project before you enter into any kind of binding agreement. Entertainment law is highly specialized, and a certified entertainment lawyer is not only competent in state and federal law, but is also familiar with the complex wording of contracts, releases, agreements, and dozens of other legal documents.

In addition to reviewing the legal documents involved in your production, some entertainment lawyers can be a big help in pitching projects or making valuable connections with financing sources, production companies, directors, even talent. She can open doors for you by sending an introductory cover letter to the networks, studios, and production companies. Most executives won't take a pitch unless they know that you have legal representation. And if your agent or other representative sells your work, the lawyer subsequently drafts and coordinates the contracts.

Lawyers get paid in several ways: by the hour, by the project, for a flat fee, or as an ongoing line in the project's budget. Some lawyers might take a lump sum up front, either as a retainer (not used toward any fees; this money is paid simply to retain the lawyer), or as an advance that the lawyer works off on an hourly fee basis. Discuss the fee structure with your lawyer at the beginning of the first meeting, and come prepared with a list of questions. Each minute you waste costs money. Whatever the amount, sound legal advice is worth the investment and could save your project significant costs down the line. In many ways, the entertainment lawyer could make the difference between your project's success and its failure.

If you can't fit the cost of an entertainment attorney into your budget, look for a legal aid organization in your area. You might consult with universities that have legal departments, or contact groups such as the Volunteer Lawyers for the Arts. There are boilerplate contracts available in books, articles, and information online; many can be customized for your project. There are also contract examples, and web site resources listed on the web site for this book.

Intellectual Property Law

For producers, virtually every project involves an aspect of intellectual property that is covered by a set of laws. Any product of the human intellect—a creation of the mind— that is unique and has some value in the marketplace falls under the term, intellectual property (or IP). This includes literary works, music, sculpture and art, inventions, images and symbols, and unique names, as well as publicity rights, unfair competition, and misappropriation. In essence, intellectual property rights allow an artist the freedom to be creative with the promise of ownership that protects his or her work from being used by others without compensation or recognition.

It's important to understand that each country is bound by its own IP laws. Just because one country operates under a specific set of laws by no means assumes that other countries follow suit. There is no sole worldwide copyright law, for example; each country has its own set of laws. And because the laws vary widely from country to country, we focus primarily on American laws and on some British law in this book. Readers living in other countries can consult their local legal experts and sources. In America, intellectual property law includes:

  Copyright law. Protects creative or artistic expression of an idea

  Trademark law. Protects distinctive symbols used in relation to services or products

  Patent law. Protects inventions

Copyright Law

Maybe you've got a great idea for a TV show: some college kids live together; their daily experiences are filled with fun, romance, and conflict. OK. So far, it's just an idea, and not a particularly original one. Anyone can use it. This rough idea is the core creative concept at its most basic.

But when you define the number and gender of the students (three British guys, two American girls and one Indian girl), give them specific names and background stories and individual characteristics, put them in a four-bedroom converted carriage house in Camden Town in north London, and then write a defined script that fleshes out these details, you've created the expression of this core idea. It's this expression—the script with its details—that is protected by copyright.

A copyright protects works that have been created and preserved in any tangible form of expression—such as written works, video and film, photography, music, multimedia, software, drama, pantomime, choreography, motion pictures, and sound recordings. It's a right that is granted to the author or creator of “original works of authorship,” and includes having the exclusive rights to exploit his or her copyrighted work, with the sole privilege of multiplying copies, publishing, and selling them.

Copyright Protection

Essentially, once you have translated your idea from your mind onto a fixed medium, like a piece of paper, a canvas, computer, photograph, videotape or tape recorder, it's automatically copyrighted; it doesn't necessarily require official copyright registration to protect rights of the copyright holder. The advantage of officially registering a copyright (see later) is that it provides specific evidence of its valid exact copyright dates and ownership, and gives the copyright holder (the artist) an advantage in seeking statutory damages, loss of profit, and/or attorney's fees.

Copyright Symbol

The symbol of a copyrighted work is © and should be affixed to anything you write, produce, draw, compose, and create. A copyright forbids only actual direct copying. If a writer or musician creates work that has an idea similar to, but not an exact copy of, someone else's, it will generally not be considered an infringement of someone else's copyright. It can only be the actual expression of that idea that's protected.

Copyright Terms

The terms of most American copyrights now last for the lives of the authors plus 70 years after their death. Most films and stills that are less than 95 years old are also copyright protected—the best way to verify a copyright is to do a copyright search with the Library of Congress. Copyrights that have expired allow those works to fall into the public domain (meaning they are no longer protected by copyright law and can be freely adapted). Many producers and writers have adapted or overtly copied the works of major writers, artists, and musicians available from this rich repository—the public domain.

However, not everything can be copyrighted. Only the expression of a creative or artistic idea can be protected. Ideas, titles, themes, or general concepts aren't protected by copyright law until they are written down, videotaped, painted, or somehow made tangible. Facts are also unable to be copyrighted. You can't copyright the facts of a person's life or an historical event, but you can copyright your expression of that idea—the script you have written about the person or the event. Rights are usually not necessary when your project involves a public or historical figure, although there are always exceptions.

The area of copyright law is a complex one, riddled with legal potholes, so should you have any doubts about who holds the copyright to a work you're interested in, it will save you valuable time and money—and potential lawsuits later—to verify its legal rights holders early in the process.

Work-for-Hire Clause

In both America and the United Kingdom, a producer or writer or other creative who is employed by a network, a production company, or other media employer is usually working under a work-for-hire agreement. This states that the employer owns the copyright to the work that the employee developed while in their employment. This is the usual tradeoff when the employer does the hiring and pays the bills. In some cases, the producer can negotiate for revenues from foreign broadcast rights, syndication, home video rights, merchandising, books and publishing, and other possible bonuses, depending on the terms of the employment contract.

Once a work has actually been created, and translated into tangible form (book, film, portrait, still), it is considered legally protected. When a copyright notice © is attached, this requires that anyone wanting to use your work must contact you for licensing fees and permissions. To copyright your work in America, call the U.S. Copyright Office in Washington, D.C. at (800) 688.9889, or register your work online at www.copyright.gov. The fee to register is under $50.

Copyright in the Digital Age

We suddenly find ourselves in the midst of the digital age. We are not only producing our programming digitally, we're also transmitting it through a multitude of digital delivery systems. We're no longer limited to traditional television broadcasting in thinking about ways to express ourselves through digital media. People who were previously satisfied to just be passive viewers, are now actively contributing their ideas in tangible form to the thousands of online sites that feature user generated content (UGC). The legal parameters for online material are being closely studied and scrutinized by lawyers, producers, traditional networks and cable channels who are setting up online tributaries, music providers, and others. This rapid expansion has created new and challenging legal scenarios for both content providers and content deliverers; at the moment, several factions of legal experts, seasoned filmmakers, and producers are looking closely at best practices for these intellectual property laws and their applications in these new digital territories.

Fair Use Defense

Under its terms, the Copyright Act allows for some legal exceptions to U.S. trademark and copyright laws, situations in which copyrighted material can be used without the copyright holder's permission. This clause is known as fair use. When a producer uses another person's copyrighted material—like a film clip or video footage, art, photographs, or music—in specific circumstances, the producer isn't required to have the copyright owner's permission. The producer can claim the defense of fair use, which declares that the work has been used in a reasonable, “fair” manner that poses no competition to the copyright holder's finances or reputation.

The fair use defense is generally claimed when the public interest is served. This can apply to news reporting, review, analysis and criticism, teaching or scholarship, or as commentary. One example is the use of a short music segment or a film clip in a documentary or a news piece. Fair use often applies in parodies of material, either to make a social comment or for humorous effect; it's usually considered fair use if it's clear that the parody is just that—a parody.

But fair use may not always apply, and it can easily be misused or misinterpreted. As included as part of the Copyright Act of 1976, there are four determining factors under which the fair use defense can be considered. These factors include:

  The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes

  The nature of the original copyrighted work

  The amount and substantiality of the portion used in relation to the copyrighted work as a whole

  The effect of the use upon the potential market or value of the copyrighted work

Fair Use for Documentary Filmmakers

In November of 2005, a statement of best practices in fair use was released after long discussion, debate, and research. The study was compiled by an impressive group of legal experts, scholars, filmmakers, universities, and media-based organizations. Documentary Filmmakers’ Statement of Best Practices in Fair Use (centerforsocialmedia.org/fairuse) was born of the frustration felt by documentarians who, when they finally located the right footage that could best tell their story, weren't legally allowed to use it. Either the copyright holder would not give permission, the licensing fees were exorbitant, or the copyright holder could not be located, despite all efforts.

This group organized their thinking around four classes of situations that filmmakers consistently deal with in every phase of production. In each case, it's possible to apply the fair use defense; they include:

  Employing copyrighted material as the object of social, political, or cultural critique

  Quoting copyrighted works of popular culture to illustrate an argument or point

  Capturing copyrighted media content in the process of filming something else

  Using copyrighted material in a historical sequence

Fair Use in the Digital Domain

The previous statement provided succinct guidelines for documentary filmmakers. In 2008, another statement was released by the Center for Social Media and the Program on Information Justice and Intellectual Property that provides similar situations of the fair use defense for online content producers.

This study, called Recut, Reframe, Recycle: Quoting Copyrighted Material in User-Generated Video, outlines its methodology and research results, including in-depth details and provocative examples of the nine categories in which the fair use clause might apply. The easy-to-understand study can be found at centerforsocialmedia.org/ recut along with specific examples for each of the following nine categories in which fair use can be considered, under the U.S. Copyright law itself, to encourage the production of culture:

I.	Satire and Parody
II.	Negative or Critical Commentary
III.	Positive Commentary
IV.	Quoting to Trigger Discussion
V.	Illustration or Example
VI.	Incidental Use
VII.	Personal Reportage or Diaries
VIII.	Archiving of Vulnerable or Revealing Materials
IX.	Pastiche or Collage

Fair Use in User-Generated Content

As the name suggests, UGC (user-generated content) is produced by amateur filmmakers, with a smattering of professionally produced content, and is contributed to an online UGC site by anyone with the skills, time, and the right equipment. Another description for UGC videos is viral videos—videos that are clever, evocative, edgy, informative, or in some way have spread virally, by word of mouth and email. There are literally billions of UGC videos spiraling through cyberspace and being shared in every language and in every country.

In the fair use study, the nine elements have the potential to help cover all UGC with the fair use defense. For example, the viral video “If Dick Cheney Was Scarface” is cited as an example of copyrighted content used for satirical purposes—that protects it as fair use. The famous “Evolution of Dance” viral video is cited as an example of copyrighted music and dance footage being reused for illustrated purposes, protecting it under fair use as well.

Avoiding Copyrighted Material

To protect themselves against possible copyright or trademark infringement, some producers insist on blurring out recognizable logos, artwork or posters on the wall behind an actor, brand names on a T-shirt, or products with obvious logos. If they're given a choice between one piece of footage or music that is copyrighted versus a better one that isn't cleared, producers might take the safer legal route. Their understandable paranoia often constricts their creative and narrative reach, yet they feel they must play it safe. Quality and passion for the project is sacrificed as a result.

Because fair use is an area of the law that's consistently ambiguous, it's currently under close scrutiny by producers and broadcasters. It raises important issues of free speech and creative freedom, especially in the United States in relation to the concept of Free Speech. Fair use is actually a defense to a finding of copyright infringement, an assurance that the defense is valid and legal. It's always prudent to consult an entertainment lawyer who has experience with issues of fair use; she can often negotiate rights for a lower fee, or can assure the network or insurer that your fair use claim is valid and legal.

The concept of fair use can be speculative. Most U.S. networks, distributors, and Errors & Omission (E&O) insurers require that the producer provides documentation that protects them from possible lawsuits or copyright infringement arguments. Insurers aren't risk takers by nature, and if there's litigation, it's up to the producer/defendant to prove that the use of the copyrighted material was indeed fair, and not a copyright infringement. The cost of legal fees can be so exorbitant that it dissuades producers from using material that legitimately falls under the fair use defense.

Conversely, taking risks can prove successful, and much cheaper than paying research fees and licensing costs. The nature of our litigious society can be daunting, and the creative rights of artists, filmmakers, composers, and others linger in a legal abyss as dedicated people with true conviction on both sides battle it out. An increasing number of filmmakers are willing to test the limits of fair use in order to preserve their freedom of expression.

The Digital Millennium Copyright Act (DMCA) was passed in 1998. Its intent is to monitor, filter, and protect online platform providers (such as social networking sites and user-generated content sites, later) from litigation, allowing them to promptly remove content if its copyright has been infringed upon.

Currently, two Internet areas in particular have attracted great attention, and both deserve closer scrutiny:

Social network sites. These online sites provide a forum for social networking, connecting people with one another via pictures, music, video, blogs and video logs, message boards, and music. Facebook.com and MySpace.com are currently the two most popular sites.

User-generated content sites. Content that is either the original creation of someone, or has been re-edited from other sources, makes up the majority of user generated content sites, such as YouTube and hundreds of others that pop up each week on the internet.

Trademark

The overall purpose of a trademark is to protect the consumer—to distinguish one product and/or service from another. An organization, individual, or other legal entity may choose a name, a word, a phrase, a symbol, design, logo, image, or combination of any of these components and simply use it. It can also be filed with the U.S. Patent and Trademarks Office, which further protects the holder in any formal procedures. When it is registered, the holder can use the symbol, ®. You can check this out further at http://www.uspto.gov.

The indication of a trademark is the symbol connected to it (™). A trademark includes any word, symbol, name, or device that distinguishes certain products, services, or items from another like it. Trademarks serve as a source of origin: you may prefer Heinz catsup, or Kellogg's cereals, or Cadbury's chocolates—each is identified with an aspect of quality assurance. Brands, consumer goods, even buildings and well-known landmarks can be trademarked. So can a movie title. In almost all cases, you don't need permission from the trademark holder if a trademarked item appears in your piece. If, on the other hand, you plan to refer to this trademarked object in a negative or derogatory way, they may pursue legal avenues to either make you stop, to charge licensing fees, or to slap you with a lawsuit. To check if something is trademarked (or patented, as discussed next), check with the U.S. Patent and Trademark Office.

Patent

When the U.S. Patent and Trademark Office grants a patent to an inventor in America, it gives the right to the inventor to prevent other people from making, using, offering to sell or selling, or importing the invention. It can be a machine, a process, manufactured article, and must be new, inventive, useful, and/or industrially applicable. The term of a U.S. patent is usually 20 years from the date on which the application for the patent was filed. Patent laws and clearances are seldom an issue in television or new media production.

Public Domain

After the U.S. copyright of material expires, it usually falls into a free use area known as the public domain. There is an appreciable amount of available literary material, music, photography, and other artistic expression that is no longer protected by copyright and can be freely used by producers. This material includes works by literally hundreds of authors, artists, composers, lyricists, and others.

Public domain material is appealing to producers and broadcasters because the rights to use it are free. However, although the material itself may be in the public domain, it may have been adapted or used by someone else, and that expression of the original work has been copyrighted. For example, the music of Chopin is in the public domain, but if the London Philharmonic Orchestra records it with their arrangement, their musicians, and their unique interpretation, they own the copyright and their recording cannot be used without their permission. Your option is to record the music of Chopin with your own musicians, only paying them and not the composer. Make sure any work you might be considering falls completely and legally within the public domain status. You'll usually need to show documentation of this clearance as a requirement for getting production insurance.

Orphan Work

A producer isn't always able to locate the holder of the copyright for a film clip or piece of music. Sometimes, it isn't clear if the material actually falls into the public domain category. This kind of undeclared material is known as orphan work, and creates a legal nightmare for the producer. There is potential risk in using this material without permission, but if the producer has genuinely pursued all avenues available to find the copyright holder—and provides clear documentation and backup of all efforts and intent—that can be strong proof of diligence if there are legal ramifications later.

Writers Guild of America Registration

Producers and writers often protect their work by registering it with the Writers Guild of America (WGA), the primary union for television and film writers. Registering thousands of scripts each year, the WGA registration establishes the completion date of a literary property, which includes written treatments, outlines, synopses, and full scripts that have been written for radio, theatrical, television, motion picture, DVDs, video cassettes/ discs, and interactive new media. The registration provides a dated record “of the writer's claim to authorship” of the registered literary material. WGA, similar to copyrights, cannot protect a title. This registration is valid for up to five years, and it can be renewed for another five years. A non-WGA member can register a script for a small fee. Check the organization's web site, www.wga.org, for more details.

Poor Man's Registration

In this scenario, a writer finishes her script, puts it in an envelope and seals it, takes it to the post office and sends it to herself via registered mail, keeping it unopened. She's now confident that she can prove when, and where, she established the origin of her work.

Wrong. This is an urban myth, and U.S. courts don't recognize this method of proving ownership or date and time of its origin. To prevent any litigation, you're best to register your project at www.copyright.gov. In some countries such as the United Kingdom and the Netherlands, however, this “poor man's registration” has a bit more legitimacy and is recognized in some courtroom dealings. A copyright is a better alternative.

II. IF YOU DON'T OWN IT, GET PERMISSION TO USE IT

In the course of the life of a project, you have to start dealing with third parties, with other people. If a book, for example, is going to be the basis of a movie, or if there is somebody's story, somebody's life rights, or if you need to get particular access to a building or certain circumstances, these are all obvious triggers for a conversation with a lawyer. When you start dealing with third parties, you have to make arrangements with them, and you have to get certain rights or permissions or clearances from them. That's when it probably makes sense to start talking to a lawyer and make sure that you are getting what you need and that you are not getting more than you need—not getting taken to the cleaners.

J. Stephen Sheppard, excerpt from interview in Chapter 11

If you didn't create your project idea, it is owned by someone else. If you want to use it, you first have to get permission. Permission to use it might be granted for free or for a fee, and for a specified amount of time. This applies to almost every aspect of your project: the script, the music, clips, images, photographs, products with brand names, props, and more. It is the job of the producer to legally protect every single component with some form of permission attached.

Licensing

When a body of work—a screenplay, a drawing, a piece of music—has been copyrighted, the rights to use it in a project must be either paid for outright or licensed for a fee. The producer (or the producer's employer) pays a fee for the right to use this copyrighted material. The financial involvements and legal aspects of licensing are highly complex; they cover artist representations and credits, copyright, promotional approvals, and much more. We will explore some of the primary areas of licensing, next, as you continue to research updated information and changes, even consult with legal experts, in the ever-evolving landscapes of digital and new media.

Brand licensing can also be a highly lucrative opportunity for a producer. A cooking show, for example, sells the license of the show to spin off other shows for its host, cook books, cooking magazines and web sites, a line of food items or cooking tools—all bearing the brand of the cooking show.

However, the area of licensing is a highly specialized area. It requires specific contracts, including elements of exclusivity, duration of use, definition of media, insurance, and more. In addition to talking with an entertainment lawyer, producers can consult with a company that specializes in rights and clearances. Both are experts whose advice is almost mandatory when considering the area of licensing.

Literary Rights and Clearances

Your storyline might rely on the use of material such as books, online research material, manuscripts, articles, treatments, outlines, newspaper columns or stories, and biographies and autobiographies, as well as adaptations, theatrical plays, or public performance rights. If you don't control all the rights involved in your project, you have no legal foundation upon which you can develop it. You will need to either:

  Option the rights. Negotiate for exclusive, limited rights to the project in return for a fee or agreement.

  Buy the rights. Negotiate to buy and permanently own all ownership rights.

Music Rights and Clearances

Most producers thoroughly appreciate the impact that music can have on a project: an identifiable theme for the show's opening credits, mood music through the show itself, end music for the closing credits. Music can inject suspense or humor or sorrow, and is yet another expression of your creative vision.

But music can be legal quicksand for a producer. Unless you are using original music that has been scored especially for your project, you must get clearance, or permission, for a license that grants you the right to use any preexisting musical compositions and recordings that are owned by someone else. If your music hasn't been licensed, it could mean delays, lawsuits, and even the possible termination of your project. For music rights clearances, by all means check either with an entertainment lawyer or with a music clearance service.

In almost every country, music falls under that country's specific copyright protection. It falls on the producer (or a music clearance service or lawyer) to determine who owns the copyright, to negotiate for permission with the copyright owner to use it, and to pay the fees that are necessary to get the clearances. Some of the larger networks and cable channels have blanket license agreements, though these agreements don't cover each and every piece of music; each still needs to be researched.

Music Licenses

There are two kinds of music licenses in the United States. Most pre-existing and/or recorded music requires that you get both:

  A Sync (synchronization) license. Gives you the right to “sync up” or match a song or music to your visual image. The publisher represents the composer of the music (the person who wrote and/or arranged the music) and the songwriter (the person who wrote the lyrics, if any). The publisher owns and grants the right to include the actual composition or piece of music that is synchronized to the picture. The songwriter(s) of that composition assigns his copyright to the publisher who shares any royalties; the songwriter(s) might also retain rights to grant the license. Some compositions can also have multiple publishers who own portions of it. These all need clearance.

  A Master Use license. Gives you the right to play a specific recording in your content. The record label owns the actual audio recording—the performance of the song the way it was recorded in the studio. The label owns and grants the right to include a specific recording of the composition in timed relation to the picture or image. The artist(s) might also need to grant a separate license. Some recordings may include “samples” of other recordings that also require clearances.

Music License Fees

The range of fees you'll pay to use licensed music can boggle the mind, and strain the budget. From free to a couple thousand for a documentary, all the way to hundreds of thousands—dollars, pounds, Euros or yen or rubles—for the license to use a popular song in a car commercial airing worldwide.

Music Cue Sheets

Producers—and anyone else involved in the process of music licensing—use a form known as a cue sheet for listing each time and place that music appears in the program. This is necessary to calculate fees that must be paid either to ASCAP (American Society of Composers, Authors and Publishers) or to BMI (Broadcast Music Incorporated), who use these cue sheets to identify the publishers and composers who are to be paid and what percentage of the royalties they're entitled to receive. An example of a music cue sheet can be found on this book's web site.

A music cue sheet lists:

  The title of each composition

  The use and timing of each music cue

  The composer(s)

  Publisher(s)

  Their performing rights affiliation

Music Venues, Geographical Territories, and Time Periods

Both the publishers and the record labels want to know how you plan to use their music. It's how they can assess the rights and fees involved. For example, fees charged for music used in a network primetime broadcast are different than those for music used in an educational nonbroadcast venue. One fee amount might be charged for use, say, on a PBS show, but if that show goes to DVD, additional fees and rights issues could apply.

Publishers and record labels also want to know what geographical territories the rights cover, such as only North American rights and/or world rights, and for how long you want to retain the license (a specific time limit or for perpetuity). Publishers require the title of the composition, its writer(s), and its publisher(s); and record labels require the title of the recorded track, the performing artist, and the source of the recorded track.

Live Music Performances

If you have plans to shoot a performance where live music might be played, or if there is any inclusion of a song's lyrics in the script, make sure you have all the necessary clearances before you shoot the performance. Before you go into the postproduction phase, clear all music you intend to use in your opening main credits, montages, background songs, musical underscore, end credits, or anywhere else in the program. The Internet is an excellent source for access to performers, recording artists, songs and compositions, publishers, and recording labels. In some cases, you can actually submit your request for clearances over the Internet.

You may find, after all your research and negotiation, that you are denied clearance to use the musical composition or a recording. The Copyright Law gives the final say to the owner(s). If you choose to move ahead without clearance, you're liable for copyright infringement and possibly other claims as well. Both ASCAP and BMI regularly monitor television and film as well as other media looking for potential copyright infringement. Their job is to protect the composers, artists, publishers, and record companies from being deprived of the benefits they're entitled to.

Alternative Sources for Licensed Music

Original Music

It often makes sense for a producer to totally bypass the expenses involved in buying licensed music, and instead, hire a composer to write and record original music. A talented composer often owns his or her own studio and equipment and can work closely with you to create a music track that compliments your vision and production. Many universities have departments for musicians and film and television composers. Young composers are often eager to get experience and projects to add to their demo reel; they can provide a real energy and originality to your project for much lower fees. In certain cases, a student can work on your project as an independent study for which she can get school credit.

You can consider hiring a composer on a work-for-hire basis. Here, all publishing and recording rights for any music composed specifically for your project by the composer belong to you. In exchange, you'll pay a fee and work out your contract details, including screen credit, soundtrack residuals, and other details that could be involved down the road. If you do have music composed specifically for your project, you want to avoid any music that could bear a strong resemblance to a well-known piece. Even this might attract a lawsuit.

For any of these options, work closely with an entertainment lawyer and/or a music clearance company. Both have established links with licensing departments who can navigate the system quickly and legally. For more complex projects involving music rights, you can hire a music supervisor whose job it is to find the right music and to then research clearances.

Stock Music

A viable option to licensed prerecorded or original music is stock music—also known as production music—that has been composed and recorded especially for a stock music house. It's considerably cheaper and is generally royalty-free. This means that the producer usually pays a one-time fee for a one-time-only use or for an unlimited use of stock music, depending on the terms agreed upon. The music's rights have been cleared for sale. The prices tend to vary, depending on the music's end use—a nonbroadcast one-time use is much less expensive than use in a prime-time network drama, for example.

The variations of available stock music are impressive, covering all genres, emotions, rhythms, and timing. As technology gets more sophisticated, composers can simulate the sound of any instrument, from an entire classical orchestra to a single acoustical guitar. Most music libraries also provide sound effects, which are often referred to as needle drops. The range of available effects is staggering—from different bird and cricket sounds, to engines, gunshots, footsteps, screams, laughter, applause, and thousands of other choices. In most cases, they are quite reasonable to license.

Stock Footage

Similar to stock music, stock footage includes photographs, film, video, images, animation, and clip art that has been catalogued and archived, and available for a fee. Depending on its end use, the footage can be licensed and often can be purchased and/ or come royalty-free, from hundreds of organizations that sell:

  Archived footage with an historical focus. Usually shot in 16 or 35 mm film, footage includes historic events, old newsreel footage, documentary material, clips or whole programs from early films and television.

  Stock footage specifically shot for resale. Generally shot in high-quality video or film, stock footage can be an excellent and inexpensive alternative to costly aerial shots of cities or landscapes, time-lapse footage, or establishing shots such as the front of Buckingham Palace or the Hollywood sign.

Stock footage can also provide a realistic-appearing background for blue-screen backgrounds, used in creating virtual sets. You can research other resources about stock music and stock footage on this book's web site.

Network Footage Clearances

For your project, you may want to use a clip of footage you've seen in a network or cable show, in a movie, a news broadcast, or online. To get the legal right to use this footage, contact the Rights and Clearances (R&C) department from the broadcaster; this department focuses on rights and clearances, and handles requests by producers to license their footage.

The R&C department first considers the source of the request, how the clips will be used, what fees to charge, and the details of the licensing agreement They also determine that the clips are not denigrating their company in any way, and that they own the legal rights to the material.

Some networks or production companies can charge as much as $200 per second or as little as $25, depending on the exclusivity and content of the material. Other fees can be considerably more, or a lot less, and occasionally might even be free. This depends on several factors: Will this footage be used for broadcast or nonbroadcast? Online, in DVD sales, or for corporate training? Is the request coming from an educational, nonprofit source, or from a rival broadcast network that might profit by featuring the footage in a program? What geographical territories does the use cover? For how long is the footage being licensed? The combination of answers to all these questions will determine your final fees and rights.

The Right of Publicity

This area of the law addresses our basic right to prevent someone from using our name, our image, or our voice for commercial purposes, or for any reason, without first getting our permission. Even a celebrity look-alike or sound-alike can be fertile grounds for a lawsuit. Although the right of publicity usually affects celebrities who have been exploited without their permission in advertising or in some other form of media, it can apply to any of us.

Producers are especially diligent in this area, knowing that each state has its own laws. You'll get written permission (a talent release) from every person you may be shooting or recording, from regular citizens, to politicians and well-known public figures. Make sure that this release is easy to understand. You can find examples of release forms in this book's web site; look for the form that's most appropriate for your needs.

III. PROTECT IT

The most important thing is to know your audience, and also know that probably any idea you have, there are a hundred other people with that same idea and you'd better have something unique and special about your particular take on it. There is not an original idea—there hasn't been since I've been around. There are just reinterpretations of things, and particularly nonfiction, where you can't copyright an idea.

Brett Morgen excerpt from interview in Chapter 11

In the world of ideas, new projects can simultaneously erupt from different pockets of the collective unconscious. Your sitcom pitch about modern-day pirates, for example, may be unique to you, but the network has already been developing a similar idea for months. It happens all the time.

Both Sides of Plagiarism Protection

Because of their understandable aversion to plagiarism lawsuits, the group or network that you're pitching to will ask you to sign what is known as a submission release, especially if you aren't represented by an agent or lawyer. Essentially, this release says that you are the legal owner of the material you're pitching, that you have given them your permission to read and consider your pitch and share it with others in their company, that they are under no obligation to use the material, and that if they are in the process of developing a project similar to yours, it's a coincidence. You can find an example of a submission release form on the web site.

First the Pitch, Then the Protection

This group, after hearing your pitch, may decide to green light it, and you shake on it. After you've celebrated, get back to reality and get every detail between you and the interested parties in writing. An agreement between professionals is more resilient when it's detailed on paper. If you don't have a written contract, it is almost impossible to receive any kind of compensation if the details are later questioned.

A traditional contract between a producer and a client specifies:

  how much time you all agree that it could take to develop, write, shoot, edit, and mix your project

  how much money that time is worth

In most cases, the client prepares the contract. The onus is on you and your lawyer to ask for explanations or changes.

Before you consider drafting any contracts, agreements, deal memos, or releases, talk first with your entertainment lawyer. If you don't have a lawyer, research similar agreements in books, on web sites, or talk with experienced producers. Find the format and wording that you can understand, adapt it to your specific project, and keep it short and to the point. Brevity can prevent misunderstandings.

The ultimate goal of a contract is to articulate to the parties what the understanding is between them in such a way that you never have to look at it again. It's to describe the understanding between the parties. It's a very valuable process. What happens in drafting contracts is that I will write something down and send it to the client or to the other side, and very often they say, “I can't agree to that,” so it's a very good thing that we wrote it down that way. So then we change it to what you can agree to or what you think you are agreeing to. It's the same with warrantees: when you sell something, you have to warrant to the guy that it is yours to sell and you are not actually selling somebody else's property. That is what a contract is.

J. Stephen Sheppard, excerpt from interview in Chapter 11

Most Common Contracts

The following contracts are those you'll most likely encounter during various stages of producing. As with any legal aspect of entertainment and producing content for media, you can benefit by consulting with a lawyer. In time and with experience, you'll understand contracts and their contexts; until then, look for specific examples of contract templates in this book's web site. For more in-depth information on other contract formats and templates and union regulations, research the listed reference texts and web sites:

  Deal memo. This is the most common legal deal-making document, used by most producers in most circumstances. It is short and sweet, written in more casual language as a one- to three-page letter between the producer and whomever she's hiring. It outlines names, job descriptions, fees, start and stop dates, any mutual expectations, county and state of legal jurisdiction, any additional pertinent information, signatures, and dates. A longer, more formal agreement is sometimes used, called a letter of agreement.

  Long form.When a deal memo isn't sufficient, as for a license agreement or distribution deal, or for a more complicated negotiation, the project may require a long form. It is usually a long 20- to 70-page document, written in formal legalese, and attempts to present the positions of all concerned participants.

  Literary releases and options. A clearly defined outline of the assignment of any literary rights from the copyright holder to the producer, the project, and/or its major participants.

  Writer employment. This agreement is between the producer and the writer(s) and outlines the writing and/or revising of a final script for a specific project. It usually follows the WGA contract formats.

  Director's employment. Similar to the writer's contract, terms of the director's employment following DGA guidelines are outlined.

  Pay or play clause. An added clause, usually part of a deal memo between the producer and the actor(s), writer(s), and/or director. It is a guarantee that the producer will pay all agreed upon fees, even if she or he is taken off the project or the project is cancelled.

Contracts for Television and New Media versus Film

TV is a fickle business. I'm only good for the length of my contract.

Tom Brokaw

In signing a contract for a film project, the producer makes a commitment to work on that one project. Put simply: when the film is completed, so is the contract. It's seldom the case in TV. By contrast, television and new media contracts usually require a commitment to the entire run of a series unless your project is a one-off program, which is often the case with pilots. You may start a TV project with a short deal memo that details the essentials of your deal—such as compensation, screen credits, the duration of the project, and so on. A more in-depth, long-form agreement may follow as the success of the project becomes apparent. Contracts for employment on a series and in most aspects of network and premium cable negotiations can be complex and most rely on long-form contracts.

Fees and Compensation

Financial compensation for the producer, especially for the independent producer or production company, is obviously an important issue to consider. The range of financing can be considerable; for example, a major network pays more money than a premium cable station, which pays more than a standard cable channel, which pays more than a start-up online or other new media format. Is your project a single documentary, a multipart reality series, or a sitcom? A movie of the week, or a one-camera attempt at creating user-generated content? Each has varying costs and profit margins, and each pays the producer fees and profits based on different fee structures.

Each project has its own budgetary parameters. Compensation for the producer depends on overall budget costs like foreign locations, big stars, complicated rights clearances, animation, and dozens of other elements that are then balanced against any revenue that could be generated through ancillary opportunities. There is no set fee structure, and each deal is on a per-project basis. Some deal structures promise bonuses, others a fee for coming in under budget, or ahead of schedule.

The Three-Phase Deal

For smaller independent producers and production companies, the client—like a network, cable channel, or other end user—first agrees with the producer on an overall total estimated budget. The client then divides the total budget into three distinct phases of payments to be made to the producer over the life of the project.

  Phase One. When the initial contract is signed by the producer and the client, one-third of the budget goes to the producer to allocate to the project's needs.

  Phase Two. After all principal photography has been completed, the client gives the second third of the budget total to the producer.

  Phase Three. When the job has been completed, and all guarantees satisfied, the producer receives the final third.

The Step Deal

Sometimes, it's not feasible to guarantee a writer that she will be the writer of choice for the duration of a project. Sometimes the script just isn't taking form, or the form it's taking isn't what the producer is looking for. So the writer is replaced, or additional writers are brought in to add dialogue or action or to develop a subplot or theme. It's commonplace for the producers to protect themselves and their project by entering into a “step deal” with the writers.

The step deal process divides the fixed payments into various steps, or phases, of developing a script. Each step along the way allows for review and evaluation, and gives notice to the writer that the producer can put an end to the relationship after any step. It's not uncommon for more than one writer to be working on one idea simultaneously; all the writers are working under this similar step deal. All the details of any on-screen writing credit(s) are negotiated on an individual basis.

This is a general overview of the step deal process, though each deal has different requirements:

  Step One. Here, the writer usually authors a synopsis of the idea. He is paid, whether or not his idea is bought. He may or may not be asked to take part in the next step.

  Step Two. The writer completes a full treatment of the story, and is paid for her work whether it's accepted or not.

  Step Three. Generally, one writer is given the go-ahead to develop the script. In some cases, additional writers may be paid to write dialog, relationships, or other elements.

Fees and Funding, Rights and Territories

Often a network, cable channel, or other end user/client gives the producer the full budget amount needed to complete a project and bring it to broadcast or distribution. The producer negotiates a license fee with the buyer that outlines how much they will pay, how many runs they get, and so forth. If there is not enough money to make the project, or if the network is contributing only a percentage of the budget, it's up to the producer to find the remaining money.

Coproduction financing is an example of one funding source. Though this doesn't apply to all projects, the producer sometimes grants the license for specified rights to the end user, who can then transmit the program or content domestically, over a certain time period, and in clearly defined territories. The producer still owns the project and retains all the rights connected to it, other than those granted to the domestic network.

The producer can then negotiate with broadcasters or end users in other countries for additional monies to fill the budget gap. This gives the broadcasters the rights to air the project, but only for a specific time in defined territories. Coproduction financing can be a complicated process. Everyone involved wants as much as possible out of the deal, like home video rights, new media rights, extensions of territory and broadcast time periods, and net profit splits. This is another area where an entertainment lawyer or coproduction specialist is an essential component of the producer's team.

Most Favored Nation

Some projects are works of genuine passion and commitment, but they have a bare-bones budget. The project's success is more important to everyone involved than their salaries, especially in documentaries and independent productions. Joining the pack are ventures into new media and delivery systems. All the players—the producers, actors, writers, directors, and financial participants—value the importance of the creative direction and story content enough to take equal salaries.

When, for example, the casting of a project is based on a most favored nation (MFN) clause, this ensures that equal opportunities are extended to all parties involved. Everyone has agreed to receive the same salary, and get equal treatment in terms of work conditions. They might also agree to alphabetized on-screen credits rather than ranking their names by star power and/or salary levels. Everyone gets the same amount and shares equal parity. Salaries under most favored nation generally tend to be union scale plus 10 percent. MFN can also apply to a soundtrack; when one artist agrees to take a specific fee for use of a song, all other artists also agree to the same fee for their songs.

Insurance Coverage and Policies

In the same way that the producer protects her project legally, she also wants to protect it financially. This is where insurance comes in to the picture. Because producing for television and new media can be an expensive proposition, and often in the firing line of possible litigation, insurance is always included in the costs. This, like entertainment law, is a complex aspect of producing; most producers consult with professionals who specialize in this financial arena.

One form of protection is a completion bond, a form of insurance sometimes required in television, corporate, and new-media production. The bond guarantees to the parent company or client that you can complete the job, and that you will fulfill all the requirements of delivery. Bond holders can legally take over much of a project's control. They can fire the crew and do whatever else they feel will bring the project back on track.

After the producer submits the shooting script, the budget, shooting schedule, the financing plan, and the bios of key production personnel, the bond company reviews them and meets with the producer and director to discuss ways the project will be produced. The primary requirement by the completion bond company mandates that the producer and the team bring the project in, on or under budget and by a specific date. The costs for the completion bond usually runs around 3 percent of the budget's total. Other insurance coverage could include workers’ compensation and liability insurance, as well as extra insurance riders that might cover a variety of contingencies, like stunt work, foreign locations, equipment, and other aspects of production. Although this is more common in filmmaking, some networks or distributors require this extra protection. You'll find more detailed information in Chapter 4.

IV. DOUBLE-CHECK IT

Reviewing and checking each legal document is a vital part of the producer's job. Some documents require extensive research and review by an entertainment attorney, although the majority of contracts, releases, and clearances are standardized forms that are preprinted or available on software program templates. Many are included on this book's web site; check with the web site's Table of Contents in the front of the book.

Find the Right Attorney

You want an experienced attorney who is reputable and knowledgeable, and respected within the media industry. Using a lawyer simply because he or she is inexpensive can cost you in the long run. Deal directly with any legal challenges in the beginning of the process, rather than ignoring them until it is too late. Any delays could result in stunningly expensive court fees.

If you don't have access to an attorney and instead rely on shareware template forms, make sure they are current with legal rulings, relevant to your specific needs, and written in language that you can follow.

Review Releases, Clearances, and Permissions

If you haven't gotten a signed release from an on-camera talent or a signed location agreement, or have neglected to obtain permission to use a film clip that your program depends on, your project could be terminated, or the magnet for a lawsuit. It is the producer's responsibility to cover all these bases, whether you are an independent producer or on a work-for-hire contract. You can find examples of talent and extras release forms on this book's web site and other online and published sources.

Check All Production Contracts

Each specific job requires a new set of contracts. Double-check the details in an often wordy contract between the producer and the production company, network, or end buyer before it's signed and finalized. Make sure that it is accurate, and that it mirrors the deal you think you have agreed on. If the wording is unclear or ambiguous, consult with a lawyer for clarification.

Location Agreements

Because owning a studio or location can be an expensive proposition, producers generally lease or rent spaces in which to shoot. They rely on location scouts to find and secure locations to avoid studio costs; they may need locations like a private home, a public museum, a restaurant, school cafeteria, a city street, a country meadow, a senior citizens home. Using this site that's owned by someone else requires a location agreement between the owner of the property (or the owner's agent) and the producer.

Agreements with Unions

If you—or a production company you're working with—is a signatory to any of the media-related unions (described in the following) this means that you have agreed to use only active dues-paying members of that union in your project. It also means that you can't use creatives—writers, actors, directors, crew, or other union members—who are not union members; you as the producer face possible fines or other repercussions.

Unions are the bargaining agents for the on- and off-screen talent in television, film, and some new media. The major unions are:

  The Screen Actors Guild (SAG)

  The Directors Guild of America (DGA)

  The Writers Guild of America (WGA)

  The National Association of Broadcast Employees and Technicians-Communication Workers of America (NABET–CWA)

  The American Federation of Television and Radio Artists (AFTRA)

  The American Federation of Musicians (AFM)

  The Producers Guild of America (PGA)

  IATSE

These guilds and unions provide specific services to their members. They take care of payments of residuals, based on a contractually agreed-upon percentage of a project's profits; they also make payments to the members’ pension and health plans. They have established specific rules and regulations around their members’ work rules, timetables, and work conditions; they also take part in negotiations and arbitrations on the part of their membership. This is all good news to the union member; it's less fun for the producer whose project's costs and paperwork load are considerably higher when unions are involved.

As you'll see in Chapter 7, the producer's focus is delegated to negotiating with unions and drafting and signing various agreements that outline the terms of the project, job descriptions, fees, contracts, and schedules—just a few of the project's ongoing details. Know the union rules and follow them. When you're hiring, be very clear about your status as either a signatory company or a non-union shop.

On-Screen Credits

Every deal memo or contract outlines the union member's specific screen credits at the opening and/or closing of the show. Negotiation for proper screen credit might include how the credit is phrased, proper spelling, font style and size, how long it stays on the screen, whether the person's name is by itself or part of a group of names, among other contractual details. This also applies to any advertising on posters, on-air promos, and so forth.

Most programs give screen credits that might include: produced by, film by, directed by, story by, written by, and composed by, as well as credits to executive producer(s), and associate producer(s). There may also be extra attention to the opening logo(s) of the production companies, the presentation credits, the executive producer(s), and a longer list in the closing credits that include a “special thanks” section that gives courtesy credits to people and companies who have contributed goods or services, copyrights, and other legally-mandated information. You can see examples of credits lists by watching programs similar to yours or by checking specific union-related web sites.

Ancillary Revenues

The producer seldom gets rich from ancillary revenues, partially because the formulas used to make the overall calculations are intentionally obtuse and vary with the network, channel, production company, or other end user. The producer's financial participation is usually based on net profits, a tricky area that can be difficult to pin down or audit. Although there are exceptions to this “formula,” here is how it works in most cases:

1.  The network/end user adds up all revenues from the project, as well as any extra sources of income that total the net profits. Networks and most end users are experts at “creative accounting,” so net profits are seldom profitable to anyone but them. The producer is wise to get as much money as possible up front, in salaries, lines on the budget, and other perks; whatever extra money comes at the back end is icing on the producer's cake.

2.  The network/end user deducts a distribution fee from this net profits total. This fee is paid to itself or an outside distributor for home video, foreign sales, and other ancillary licensing. All production costs, which could include each phase of production, insurance, overhead, services, costs for promotion, and more, are also deducted.

3.  The network/end user divides any profit that might still be left between the producer and themselves. The producer usually receives a much smaller percentage than the network, but over time and with experience, producers can negotiate deals that benefit them as well as the network.

Making the Deal: A Final Check List

  Get it in writing. Protect yourself with ample documentation. Follow up an oral promise with a written memo or email version of the points made and agreed upon.

  Take notes. In a meeting or on the phone, take notes and date them.

  Keep a paper trail. Even in this electronic age, keep hard copies as well as computer backups of correspondence and memos sent and received, and dated. Keep each draft of any screenplays. If you've made some form of contribution to the story, follow that up with a brief memo outlining that contribution—dialog, story line, theme, subplot, location, etc.

  Register your work with the WGA. This is a valuable verification of your ownership; register it before you begin to pitch it around.

  Check out potential buyers. Be objective and realistic about excited interest in your project. It may be wonderful, but the people may not be. Check them out thoroughly—search the web, ask other filmmakers, do a credit check.

  Don't make the first offer. See what the other side has to offer first. And never sign any binding contracts without thoroughly dissecting each point with your attorney.

  Keep each promise you make. If you can't keep it, don't make it.

  Don't be afraid of negotiation. In most cases, it is expected.

  Always try for a win-win. In this ideal scenario, everyone is happy, and no one sues.

  When in doubt, hold it out. Should you suspect that you may not get paid what you originally agreed upon, you can consider holding onto all video, film, or digital material until you've cashed—and cleared—their check.

ON A HUMAN LEVEL …

As an effective producer, you understand the value of making everyone feel that they are being treated fairly—and that includes you. Yet the pressure of making everything fair, and legal, can create an emotional detachment from the people with whom you are making the deal. Stay conscious of this: being a good producer requires being empathetic, involved, and emotionally balanced, as well as staying objective.

SUMMARY

The legal component of producing is as important as the creative, technical, or budgetary needs of your project. In many ways, it is the most important part. We live in a litigious society, and an overlooked detail can lead to production delays, even lawsuits. But you can't be expected to know everything, especially as you first embark on your career in producing. So, it's worth the investment to have an entertainment lawyer—and an arsenal of legal textbooks, resources, and templates—on your side.

Now, with all the legal aspects taken care of, you can move more knowledgeably into pitching and selling your idea, coming up in Chapter 6.

REVIEW QUESTIONS

1.  Why is legal documentation important to a producer?

2.  What are the responsibilities of an entertainment attorney?

3.  What are three areas of intellectual property?

4.  What's the difference between a copyright and a trademark?

5.  How can you legally protect your own project idea?

6.  What are the steps you'd need to take if you wanted to use a Top Ten album or single as music for your project?

7.  Pose an imaginary situation in which a favored nation clause could benefit your project.

8.  Name three types of production insurance.

9.  What's the primary difference between a contract for a film and one for TV or new media?

10.  Why are screen credits included in a contract?